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Transaction waits and blockchain congestion actually discourage “nefarious actors,” according to a study

In accordance with a study, a blockchain’s “fullness” is directly correlated with its security. A recent research paper from Florida Atlantic University and the University of Mississippi suggests that blockchains with “full” blocks, especially when there’s a transaction queue, seem to offer an additional layer of protection against malicious actors, money launderers, and potential fraudsters. Titled “Bitcoin Blocksize, Custodial Security, and Price,” this research delves deeply into the Mt. Gox crash and other incidents involving the theft of cryptocurrency from crypto exchanges.

The study’s fundamental idea is that those engaging in illicit activities aim to complete their money laundering transactions as quickly as possible. According to the paper: “This inquiry is guided by the following insight: the closer the block size is to its limit, the higher the likelihood that the next transaction will be recorded in a later block rather than the most current one. When these cybercriminals breach a crypto exchange or ‘shut down’ a fraudulently run one, they want to launder the stolen bitcoins expeditiously.”

To test their hypothesis, the researchers analyzed historical Bitcoin blockchain data and a “scam report” from a crypto exchange. They examined data from the period 2010 to 2021 and calculated a “fullness” score for the blocks to assess the information. Once they established a benchmark, the research team assessed two specific metrics using historical data: the impact of block fullness on the price of Bitcoin and how block fullness acted as a deterrent to malicious actors.

According to the paper, their evaluation confirmed their hypothesis that “full Bitcoin blocks serve as a deterrent to hackers and scammers because they indicate network congestion.” They also concluded that full blocks “signal an increase in network security, which is reflected in the price.” Therefore, they realized their second hypothesis that block fullness affects the price of Bitcoin. According to the team’s findings, block fullness is noted as being 20% lower on an “average day” when there is a cryptocurrency breach or fraud incident.

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